Supporting the businesses that sell their products via your site is good for them and your bottom line, too.
Recently established an online marketplace, or perhaps you’re planning on doing so soon? If that’s the case, you’re in good company. Here in Australia and around the world, we’ve seen established bricks-and-mortar retailers and online-only start-ups piling into the space that was historically dominated by Amazon and eBay.
And they’re going great guns. Take Barbeques Galore, the quintessential Aussie outdoor entertaining brand, for example. Its range tripled in size following the launch of its online marketplace in December 2021. Within three months, marketplace sales accounted for more than ten percent of the company’s total online sales.
It’s a similar story over at ecommerce fashion retailer SurfStitch. Establishing an online marketplace allowed it to increase its number of listed products by 70 percent, and the company’s GMV increased apace: up an average of 74 percent across all categories.
Riding the Demand Wave
“By 2023, 66 percent of global B2C e-commerce will come through digital marketplaces, and the number of enterprises selling on marketplaces is expected to double” – Forrester: B2B e-commerce forecast)
Organisations that market the products of a slew of third-party sellers alongside their own stand to enjoy greater visibility, higher sales volumes and an annual revenue increase of between 30 and 50 percent, on average, in the first year. What’s not to like?
But hitting those high notes isn’t as simple as installing online marketplace software and signing up a string of sellers. A decade of experience in the ecommerce sector has taught me that the most successful online marketplace operators are those that are laser-focused on helping their sellers succeed. If you’d like to join their number, here are some tips.
Outline Your Expectations
Most sellers want to do the right thing, but it can be tricky for them to meet, let alone exceed, your expectations if it’s not crystal clear what those expectations are. Lay them out from the get-go – how you’d like sellers to list and present their stock, how quickly they should dispatch orders, respond to customer queries and complaints, process returns, and so on – and sellers will be able to make informed decisions about whether or not they’ll be able to deliver.
High standards are admirable, but they don’t mean much, unless they’re maintained and enforced. Monitoring your sellers’ performance against a series of thresholds and metrics – think late shipment and cancellation rates – and following up with those that fall outside acceptable parameters is good for your business and theirs too. It’s the means by which you’ll ensure your customer experience isn’t compromised by businesses that don’t share your dedication to excellence. For sellers, meanwhile, having access to data points allows them to see where improvements can be made, in both their product range and fulfilment experience.
Educate and Encourage
As an online marketplace operator, you’re well placed to see just how top sellers achieve their marvellous metrics and where you can coach on areas of improvement. Sharing best practices – using an automated inventory management system to ensure they don’t inadvertently accept orders that can’t be fulfilled, for example – with low-ranking sellers is a great way to help them step up their game.
Create Feedback Loops
Successful marketplaces are built on strong relationships. Establishing healthy feedback loops makes it easy for sellers to communicate with you about issues that may be hindering their efforts to make sales or deliver the optimum customer experience. Ensure yours have a primary point of contact – an account manager or seller success executive – and consider launching quarterly or annual seller surveys to provide them with regular opportunities to have their say.
Drive Discoverability and Sales
It’s on your sellers to ensure their product ranges and customer service are up to scratch. And it’s on you to create and maintain a web strategy and merchandising plan that drives traffic to your site and makes it easy for prospective customers to locate products that interest them when they land. Optimise your search algorithm, merchandise your home page in a compelling way and run on-point promotions and deals based on a calendar of key dates – Valentine’s Day, Mother’s Day, Back to School and the like – and your sellers will stand a better chance of converting browsers into buyers and repeat customers.
It may be your online marketplace, but without high-quality, committed sellers, its chances of long-term success are slim. That’s why it makes sense to go all out to help every supplier in your network succeed. You, and they, will reap the rewards together.